Nearly two-thirds of households are setting aside money for retirement, taking advantage of either a registered pension plan, an RRSP or a tax-free savings account, Statistics Canada said Wednesday as it released the latest batch of numbers from the 2016 census.

Of 14 million households, 65.2% made a contribution in 2015 — the most recent year for which data was available — to one or more of the three major savings vehicles, an apparent counterpoint to the prevailing narrative that too many Canadians take a cavalier approach to retirement.

Plan choice depends on age

The numbers released Wednesday show a clear preference among younger workers for TFSAs. Of the 45% of major income earners aged 15 to 24 who saved for retirement in 2015, 33.5% opted for TFSAs, compared to 14.3% who contributed to an RRSP. For 25 to 34 year olds, 42% put money in a TFSA, versus 37.3% for an RRSP.

Perhaps not surprisingly, those aged 35 to 54 — a generation more familiar with registered pension plans and the RRSP model than with TFSAs — showed a preference for the former, at more than 45%. They were, however, better savers across the board, with nearly three-quarters of their ranks opting for at least one of the three savings tools.

Cash goes to home down payments

Where young and middle-aged would-be savers are concerned, a dramatic increase in housing prices relative to wage growth has been one of the biggest challenges, said certified financial planner Jason Heath.

“Double-digit real estate appreciation and 1% wage growth don’t work long run on a lot of levels,” said Heath, the managing director of Objective Financial Partners in Markham, Ont., outside Toronto.

“This means that more cash flow is being allocated toward home down payments, and it’s taking longer to pay off mortgages. I’m seeing a lot of cases where people are going to have to rely on home equity as part of their retirement plan.”

Heath said he believes baby boomers are largely doing fine when it comes to financing their retirement years.

“They bought homes and saved for retirement during a boom time,” he said. “It’s the latter half of the gen-X generation and millennials who are getting squeezed.”

A bigger challenge for young and middle-aged Canadians is the low interest rate environment and the impact that the aging population is having on the balance between savers and borrowers, despite efforts by government to stimulate the economy, said Fred Vettese, chief actuary at Morneau Shepell in Toronto.

“Interest rates are low now, and they’re going to be staying low,” he said.

“That’s going to be an issue for retirees, because obviously that means they’re not going to get as much of their income from investment returns in retirement as used to be the case.”

Problems with savings data

It’s the first time the census has probed the question of saving, taking advantage of tax data to paint a more accurate picture of just how seriously Canadians take savings — a picture which experts say has long been distorted by suspect data and aggressive investment marketing.

“I think things in general are still in pretty good shape when it comes to preparing for retirement,” said Vettese. “For the most part, when you look at middle-income Canadians, they are saving. So one of the problems with the statistics is that they end up being misleading.”

Vettese said he’s particularly frustrated by the oft-cited national household saving rate, which landed at 4.6% in the second quarter of this year, compared with 20% in 1980. “That’s the stat that people keep on harping on, and it has dropped a lot — but that household saving rate is a funny number.”

For starters, household saving doesn’t include Canada Pension Plan contributions — “for most people, you figure that their CPP contributions are savings for retirement,” he said — which means federal efforts to enhance the pension plan won’t change that figure “one iota.”

What’s more, Vettese said, the household saving rate deducts what retired Canadians might take out of their nest egg once it becomes a source of income.

“So, with an aging population and more people drawing an income than used to be the case back in the 1990s, obviously it’s going to look like people are saving less.”

Research compiled by actuary Malcolm Hamilton of the C.D. Howe Institute suggests that the rate of retirement saving for employed people has actually almost doubled in recent decades.

Hamilton’s data-crunching exercise — which sought to correct for household saving’s shortcomings — showed a surge between 1990 and 2012 in contributions to retirement savings plans, even as household saving dropped sharply. Over that 22-year period, contributions went from 7.7% of earnings to 14.1%.

“Some of that is public pension saving plans, so employers and employees are both putting money in,” said Vettese. “But some of that is actually people putting money into their RRSPs. And you also have to figure that some of the money in TFSAs will be used for retirement.”